Many people don’t ask contractors questions because they think they don’t know what to ask.
Actually, you don’t need to know much, or anything, about construction, to find out what you need to know before hiring a contracting company. Think about that conversation as a job interview because that’s what it is. You’re hiring someone to work for you. Don’t just “trust your gut.” That might work sometimes, but just as often it does not and when it doesn’t, things could get unpleasant. If you had a company, and five applicants for the same position, you’d be fairly selective so as to hire the one most likely to work out and stay for a while, right? The same principle applies here. So ask:

Do you have a contract?

Elementary? Yes, but you’ll be surprised by the number of “contractors” who…will not provide a written contract. A contract is a written agreement intended to be enforceable by law. If you didn’t sign one, you have little to go on in the event the contractor fails to live up to his promises, does shoddy work, takes forever, walks off the job, etc. Any dispute will be he said/she said. So your ability to take the contractor to court is highly limited.

That contract should contain:

1) a job description

2) start and completion dates

3) payment terms

4) specification that the contractor is responsible for securing required permits

5) penalties for missed completion dates

6) procedure for work orders/changes above and beyond the original scope of work

7) a detailed list of costs and materials 

8) a termination clause that describes circumstances in which either the customer or the contractor can leave the job without penalty.

Can I see proof of insurance?

This is big. Should something happen on that job and the contractor is not insured, you as his employer is in certain circumstances liable. You might think: well, of course, every contractor would carry insurance.
Contractors in some states but not all are required to carry general liability insurance and in all states except Texas are required to carry workman’s compensation insurance if they have even one employee. If that contractor tells you he’s insured but turns out not to be, you could be liable in the event of an accident. If, for instance, you hired a roofing contractor to put a new roof on your house and someone on the crew fell and was severely injured, and that roofer had no workman’s compensation insurance, you could be sued for medical costs, lost wages, etc. Insurers and their lawyers will come after whoever has assets. Some contractors choose not to carry worker’s compensation because it’s expensive—as much as 45 percent of hourly wages—and carrying it forces them to charge a lot more for the work. (Roofers have the highest accident rates in construction.) So if you’re looking to have work done and someone hands you a proposal with a price that’s proposed is substantially less than anyone else’s, make sure you ask for proof of insurance, both general liability (of at least $1 million in coverage) and workers compensation. Not just some certificates proving that the company bought a policy from someone at some time, but showing current coverage for general liability and worker’s compensation, for anybody that’s going to be working on your property.

May I see your contractor’s license?

Some states—but not all— require contractors to get a license before they can operate. More and more states have moved to licensing. In those states, contractors have to take and pass an examination to be licensed. In order to take the examination, they have to show they’ve worked a certain number of years in whatever class of construction it is they’re applying to be licensed in. To be licensed, they have to prove reasonable competency. Some states require only that a contractor register, which requires no proof of professionalism or competence. If a contractor tells you he doesn’t need a license, there are plenty of websites where you can find out whether or not your state requires licensing. If it does, and he isn’t, you’re asking for trouble.

Who’ll be working on my job?

Subcontracting is a common practice in residential construction, on both inside and outside projects. There are many great subcontractors who sell their services to general contractors and leave it to the general contractor to generate business via marketing and sales. But you should know when you sign the contract, that the work is subcontracted. That’s for a few reasons.
First, who will you communicate with if you have a question or an issue, the job foreman, a project manager or the company’s office? Secondly, you need to know that whoever’s subcontracting the work is currently insured. If the contractor you’re interviewing says: ‘Oh, we’re insured,’ then the question is, ‘Can you show me updated insurance certificates and is proof of current insurance included in your subcontractor agreement?’ If he says it is, ask if you can see the agreement.

Do you do jobs like this on a regular basis?

A construction job is a big-ticket item. A roofing company might sell 300 jobs a year, a remodeling company 30 or 35 big projects, such as kitchen remodels. It’s not like a retail store, selling thousands of items and generating hundreds of transactions a day. A residential construction job is essentially a matter of finding solutions to problems that exist in the home. And like any other activity, the more experience you have, the likelier you are to know how to solve problems and solve them quickly. A general contractor may know how to install windows and siding but have zero experience in designing and constructing a bathroom or a kitchen. But if the company is slow on work, he may attempt to take on jobs outside the field of his expertise. That’s good for his bottom line, but not necessarily for your house. So ask if the company has experience working on a project like the one you’re envisioning.

Do you have professional certifications?
Companies that specialize in certain types of work—let’s say roofing, siding, and windows—often prefer to use the products of a particular manufacturer. That’s because they know the product and they know how the manufacturer specifies installing it. Many manufacturers such as roofing products supplier GAF or fiber cement siding manufacturer James Hardie have certification programs where installers are trained at the factory in proper installation techniques. They’re not out there winging it, they’re installing to written specifications. If your contractor is certified by a manufacturer to install that company’s products, that’s a big plus.

Do you have a list of recent customers I can contact?

Reviews are great, and they’ll tell you a lot, but calling references will give you a sense of whether or not this is the contractor for you. Yes, the contractor can pick and choose those references, but those people are far more likely to be forthcoming with you than they were with him. Call with a list of questions prepared. Almost inevitably, people are happy to talk about their experience. Was he on time? Were his people courteous? Did he promptly return calls? How do they feel about the quality of the work? Have their been service issues since that time and how were these handled?